Senate Bill 94 Deters Attorneys From Assisting Homeowners

California State Senate Bill 94 was passed to protect homeowners from loan modification scams. It may also have an unintended consequence - eliminating a homeowner's ability to retain an attorney to help them save the homeowner's home.

Senate Bill 94 prevents attorneys from receiving fees until after the contracted services have been rendered. While the actual language of the bill is vague, the bill could be interpreted to mean that attorneys will only get paid for services after the many months of negotiation with the lenders, and only if successful.

Recent studies have shown that only about 9% of qualified mortgages have been modified by lenders. Bank of America only modified about 4% of eligible mortgages. The loan modification process can take up to around 6 months. It is not economically feasible for an attorney to work for a homeowner for 6 months for only a 4-9% chance of getting paid. This will basically leave homeowners without representation, and alone to fight their lenders. That was not the purpose of Senate Bill 94. Unfortunately, that is the likely result.